Smoking Ban

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  • Topic: Welfare economics, Deadweight loss, Pareto efficiency
  • Pages : 1 (358 words )
  • Download(s) : 96
  • Published : November 10, 2008
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Secondhand smoke exposure causes disease and premature death in children and adults who do not smoke. According to the Surgeon General, the scientific evidence indicates that there is no risk-free level of exposure to secondhand smoke. Cigarette smoking creates a negative consumption externality which leads to inefficient amount being smoked. Cigarettes are smoked to the point at which the private valued (demand) equals the private cost (supply). However, since the social value of smoking is lower than the private value there is an excess of amount of smoking over the social equilibrium point. This creates a deadweight loss. The social value of smoking is very small if not nil, since the benefits of smoking are outweighed by its costs. The cost of smoking includes the lives lost due to both first and secondhand smoke and the increased Health Care costs due to smoking. The only people who “gain” from it are people who enjoy smoking, but these people also risk there health by smoking. Banning smoking on campus would increase efficiency since it would decrease dead weight loss by moving the amount of smoking closer to the socially desired value.

The ban of smoking on UBC’s campus would lead to a potential Pareto Improvement. This is because it would make non-smokers better off by a greater amount than it would smokers worse-off. Everyone who attends UBC campus would be made better off since they would no longer have the risk of being exposed to secondhand smoke. Smokers would be made worse since they would have to leave campus to smoke. The non-smokers would be made better off by an amount that would allow them to compensate the smokers (net losers). In this case, such compensation is highly unlikely since there are more non-smokers than smokers on campus.

The ban of smoking on campus could also be seen as a Genuine Pareto Improvement. This is because it would non-smokers better off and would not make smokers worse off, since smoking actually harms a...
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